For the Quarter Ending March 2023
North America
Polylactic Acid (PLA) prices escalated in the North American market during the first quarter of 2023, with costs ranging at USD 3580/ton Contract FOB USGC in February. Downstream packaging product saturation, commoditization of Polylactic Acid, emerging customer channels, and growing price sensitivity have changed the marketing prices of PLA manufacturing companies in the packaging industry. Along with this, an increase in operating costs, logistics, and utilities based on Polylactic Acid elevated in the market. The procurement of Polylactic Acid increased in the North American market with lowering inventories rate of the product with increasing consumption with the traders.
Asia
The market value of Polylactic Acid elevated in the Asian market during the first two months of Q1, 2023, with prices ranging at USD 2730/ton Contract CFR Qingdao. An enormous quantity of energy is needed to produce PLA, which raises the price of the completed good. The market value of maize starch was under pressure because of the increase in energy costs. The effectiveness and expense of the PLA production processes have an impact on the price of the materials used in packaging farther down the supply chain. However, this trend reversed during the last month of the quarter due to decreasing demand from the downstream market, which elevated the inventory level of Polylactic Acid with the traders and suppliers.
Europe
During the first quarter of 2023, the prices of Polylactic Acid depleted during January while escalating during the remaining two months of the quarter, with prices ranging at USD 3905/ton FD Immingham in March. The exporting nations' production costs rose to pressurize the market value of the product. A decrease in the supply of the product in the region due to a slight supply chain disruption caused a scarcity of the product among the traders. Increasing competition between the suppliers of PLA in the region impacted the prices of Specialty Chemicals. With a rise in consumption, the inventory level of the product decreased with the merchants, and stocks of feedstock Corn Starch were also observed to decrease. The freight charges were also increasing from North Europe to East Asian countries.
For the Quarter Ending December 2022
North America
During the fourth Quarter of 2022, Polylactic Acid prices witnessed mixed sentiment in the US market amidst rising fear of recession and varying demand strength. The upstream (corn) prices declined sharply towards the quarter end, significantly impacting the final prices of Polylactic acid in the North American market. Employment decreased only marginally as a result of cost-cutting measures, uncertainty about future demand, and lower production requirements. Price inflation rates for input costs and output costs both dropped; hence overall Polylactic acid market remained on the lower end. The demand for biodegradable plastics from meal delivery services varied as the country had festive holidays. Inflation and a supply chain gap have an impact on Polylactic acid market pricing in the US.
Asia Pacific
Towards the end of Q4 of 2022, the Asia-Pacific market witnessed a declining trend for Polylactic Acid backed by the quiet Chinese market and declining demand dynamics. The Chinese government's restrictions on the country's main financial centers (Shanghai, Beijing, and Wuhan) influenced the operational rate of end-use (biodegradable packaging) manufacturing units. The upstream (corn) prices dropped towards the quarter end, impacting the final production cost of Polylactic acid. Both the product's production and demand fell. Due to the low demand for the commodity, the supply chain for feed from Thailand (a major exporter) was ordinary. The inventories moved slowly as well. Because there was low trading, Chinese manufacturers had enough supply to cater to the local demand.
Europe
In the fourth Quarter of 2022, the overall market dynamics of Polylactic acid were stable on account of stagnant demand for the product from the downstream market. The prices of PLA were impacted by rising inflation and commodity prices. Due to a change in consumer priorities amidst the threat of an upcoming economic recession, prices in Germany have fluctuated throughout the Quarter. The supply chain continues to be hampered by German railway lines. A worsening supply chain has been preventing the import of feed due to port congestion in many German ports caused by labor strikes in the first half of the Quarter. When industrial activity decreased slightly in the German market, the price fell towards the Quarter. Low demand and declining industrial output affected the market prices for Polylactic acid.
For the Quarter Ending September 2022
North America
During the third Quarter of 2022, Polylactic Acid prices witnessed mixed sentiment in the US market amidst rising fear of recession. According to market participants, the prices of Polylactic acid have been delayed due to the continuous decline in corn prices in the United States. However, demand for biodegradable plastics from food delivery services fluctuated. Inflation and the delay in the supply chain also governed the market prices of Polylactic Acid in the United States. Polylactic acid production continued in the domestic market because manufacturers had enough feedstock to meet domestic demand. Many vessels have been delayed owing to increased transit time in ports such as Houston and others. As a ripple effect, the Polylactic Acid prices for Contract FOB USGC (USA) settled at USD 2985/MT.
Asia Pacific
In the Chinese market, the Polylactic Acid Price showcased stagnant price movement amidst fluctuating feedstock costs. According to market participants, the inclination occurred due to rising feedstock prices and corn and lactic acid prices in the domestic market. Furthermore, feed transportation from the United States remained chaotic as the supplying country faced inconsistencies in the feedstock. The demand for biodegradable plastics in the Chinese market has remained positive, impacting market prices for Polylactic Acid. New environmental regulations, societal concerns, and increased awareness have prompted the search for environmentally friendly products. Furthermore, the domestic production of Polylactic Acid has remained low due to a lack of feedstock, sugarcane, and corn from the supplying country. Thus, the Polylactic Acid prices for CFR Qingdao (China) settled at USD 3060/MT.
Europe
Polylactic Acid prices in the European market experienced mixed sentiments during the third Quarter of 2022. According to market participants, inflationary pressure on commodity prices has become a critical reason for price increases in the domestic market. Furthermore, natural gas prices have remained high, affecting the Polylactic Acid market. However, in August, Polylactic Acid prices remained stable in the German market, supported by steady demand from downstream industries and a reduction in inflationary pressure. Meanwhile, gradual consistency in the supply chain, combined with adequate stock availability, resulted in a monthly constant price trajectory. Furthermore, the restricted import of natural gas from Russia has raised domestic energy prices. Thus, the cost of Polylactic Acid was assessed at USD 3865/ton CFR Hamburg (Germany).
For the Quarter Ending June 2022
North America
In the second quarter, the market dynamics of Polylactic Acid witnessed a positive hike in the North American market with an increment of 3%. The prices got assembled at USD 2945 per MT, FOB USGC, USA towards the quarter end of rising feedstock prices. The major Polylactic Acid producers in the North American market witnessed feedstock, corn, and cassava shortages. The rising temperature increased the demand from residential and commercial sectors leading to a hike in electricity costs. Supply shortage, high electricity cost, and firm demand from the domestic market significantly elevated the prices. Its biodegradable properties increase its demand in medical sectors, proportionally impacting the market sentiments of Polylactic acid in the North American market.
Asia Pacific
Polylactic Acid prices showcased mixed sentiments in the Asia-Pacific market during the second quarter of 2022. Major producers of Polylactic acid quoted the market prices as USD 3987 per MT, Ex-Qingdao, China, in June. Countries such as Malaysia and Thailand are central feed, corn, and Polylactic Acid producers in the regional market. During mid-quarter, the prices perceived their stability as the country resumed its production rate, but the operation was short-lived as the lockdown was reimposed. The stationary market and sluggish demand from the downstream sector governed the market dynamics of Polylactic Acid. Furthermore, feed availability from USA and Netherlands was hindered, creating a gap between manufacturers and end-users. Demand for medical services such as sutures and organ transplants remained stagnant, stabilizing the market dynamics of Polylactic Acid.
Europe
Overall market sentiments toward Polylactic Acid were accessed positively throughout the second quarter. Approximately a 2% hike was witnessed, and the prices were assembled at USD 3970 per MT, CFR Hamburg, Germany. Inflated commodities and rising demand for biodegradable plastics among the public have raised the prices. Demand for medical services kept driving the market prices of Polylactic Acid. In addition, feedstock prices remained on the upper edge in the second quarter, proportionally escalating the prices of Polylactic Acid. As per manufacturers, frenzy transportation of feed from the USA became the root cause for the inclined prices in the regional market. Heat waves and several sanctions have hurdled the operational rate of Polylactic Acid.
For the Quarter Ending March 2022
In the first quarter of 2022, the Polylactic Acid market remained firm with a slight increment of 1% when compared with Q4 of 2021 in the North American region. The demand outlook from end use sectors such as food services and others remained favourable which led to its substantial offtakes. Being biodegradable, its demand in medical services have compelled manufacturers to increase the production rate. Feedstock shortage hindered the production of Polylactic Acid by several exporters from the Asia-Pacific countries after the conflict between Russia and Ukraine. Polylactic Acid price quotations were observed at USD 2660/MT, FOB USGC, USA in the month of January and USD 2630/MT, FOB USGC, USA towards the quarter end.
In the first quarter of 2022, Polylactic Acid market in the Asia Pacific region remained stagnant throughout the quarter despite the hike in the feedstock, corn, and sugarcane prices. The market sentiments in Q1 were governed by the ample availability of feedstock along with the high plant operating rates in order to cater the demand in the domestic market. The resurgence of Covid virus in China surged the demand of Polylactic Acid in medical devices. The prices of Polylactic Acid were quoted at USD 2790/MT, CFR Qingdao, China in the beginning of quarter and USD 2810/MT, Qingdao, China towards the quarter end.
During the first quarter of 2022, the European Polylactic Acid market witnessed stable prices which turned firm by the quarter end. On the other and, in Q1 of 2022, the prices have shown a decline of approximately 7% in comparison to Q4 of 2021. The prices in the month of January were observed at USD 2908/MT, CFR Hamburg and USD 3090/MT, towards the quarter end. The growth observed during the quarter was due to the firm demand from downstream sectors. Manufacturers reported sufficient availability of feed to fulfil the domestic demand in the European region.
